Cyber Security Insurance: How Businesses Will Develop in 2018

The importance of cyber security insurance, and how businesses can increase their privacy to protect themselves against hackers.

Feb 05, 2018

So much of our data is available online; and it’s proved too much of a temptation for hackers, who are constantly finding new and innovative ways to access that information, and steal details.

It’s a major worry on both a personal and professional level; and for that reason, it’s crucial businesses take steps to protect themselves.

In 2016, almost 50 percent of UK businesses were hit by a cyber-attack or breach, costing big businesses targeted an average of £20,000. Fraudulent emails were the most common attacks, followed by viruses and malware.

What Is Cyber Security Insurance?

Cyber security insurance can help to minimize the financial risk of a security breach, and there are two types: first-party and third-party insurance. Third-party insurance is typically geared towards third party companies who manage the network, system or software attacked. It’s recommended that most businesses get first-party insurance, which usually covers damage to digital assets and business interruptions.

The issue is, that cyber security insurance can’t protect against the reputational damage that comes with an attack. Everyone still remembers the data breach suffered by the NHS in March 2017, where over 26 million patients had their records available for anyone to view.

Similarly, HSBC was hit by a cyber-attack in January 2016: whilst it defended its systems, it still made headlines, causing panic amongst its 17 million banking customers.

If your business becomes a victim of a cyber-attack and you have insurance, it’s important that you examine the details and relevant extensions. You want to ensure that there aren’t any terms and conditions that will make your claim invalid.

Cyber security insurance is hugely advised, as it will help to cushion the blow. However, you don’t want to rely on it alone. Make 2018 the year you educate yourself and take steps towards improving your online security, to reduce your risk of an attack.

Understand the Risks

If you aren’t yet fully clued up on the risks and consequences of a cyber-attack, then you need to be. The Government has launched a Cyber Essentials scheme, with its aim being to help businesses protect themselves. On the website you’ll find tips on improving your security, and you can even become certified in this area.

These tips may seem basic, but are of paramount importance: you should protect your internet connection with a firewall, which will act as a buffer zone to analyze the safety of incoming traffic. Encrypt your data, secure your hardware, and ensure all employees set difficult passwords for their logins – the NCSC advises how you can make your password secure.

Think about the data your employees can currently access: workers need enough access to do their job, but not everyone needs extra permissions. Also, don’t forget to download antivirus software to defend yourself against malware.

If you haven’t implemented any of the above steps, then it’s time to do so.

Beware of IoT

The rate at which technology is developing is exciting, and one hot topic is the Internet of Things (IoT). By 2020, it’s predicted there will be over 25 billion internet-connected devices; and understandably, businesses want to get in on the action. After all, greater access to data means they can improve their efficiency, and better tailor their offerings to customer needs.

However, with this greater access to data comes the threat of a cyber-attack – especially if there’s an increase in multiple devices that are wired to your network. In 2017, cyber-attacks on IoT devices were up by 280 percent; and it’s predicted that by 2020, a third of all cyber-attacks will be on these devices.

If you’re using IoT devices as a business, you should be treating them with the same amount of caution as your laptops, mobiles and desktops, to help reduce the risk of them being hacked.

Can Chatbots Prevent Cyber Attacks?

Businesses across the world have already embraced the chatbot technology; working effectively at providing speedy answers to customer queries. Consumers are happy with this: 69 percent said they would prefer to interact with a chatbot before a human, as it meant they could get an immediate response. 80 percent of businesses say they want to use chatbots by 2020.

A chatbot works by utilizing machine learning and language processing techniques, in order to effectively carry out its duties. It’s these skills that can detect any malicious code – way before a human would even know what to look for. Essentially, a chatbot can be seen as a 24/7 security guardian.

In 2018, businesses could look to invest in chatbots as a way to increase cyber-security. Rather than being customer facing, chatbots could instead scan a business’ system to see if there are any red flags. Constantly detecting ongoing attacks, you could ask questions such as “have there been any ransomware alerts in the past 24 hours”, which will be responded to in just a few seconds.

Some cyber-attacks will leave your business feeling the effects instantly, whereas the impact can be delayed for others, meaning repercussions are felt at a later date. That’s why it’s so important you get yourself protected with cyber security insurance. However, don’t think that the insurance will protect you completely, as there are steps you should be following to protect yourself against an attack.

Nevertheless, with constant innovations in technology, the threat of attack is evermore present; and ultimately, businesses can’t really afford not to be insured.